Is Mugabe softening on indigenisation?

WHILE fielding questions from journalists at a press conference soon after cabinet’s swearing in on Wednesday, President Robert Mugabe deliberately avoided answering a direct question on whether his government would revise the controversial US$1,7 billion Memorandum of Understanding (MoU) deals signed with mining houses.

HERBERT MOYO

A major talking point on Mugabe’s new cabinet was the perceived demotion of Saviour Kasukuwere, whose modus operandi was widely considered abrasive, from Indigenisation to Water, Environment and Climate — a development believed to signal a softening of the veteran leader’s stance on the controversial indigenisation policy which was Zanu PF’s election campaign centrepiece.

In a two-part question, Mugabe was asked whether the appointment of Francis Nhema, seen as more level-headed operator, as Indigenisation minister represents a paradigm shift and if there would be a revision of the deals Kasukuwere had signed with mining companies at the beginning of this year.

Mugabe responded that the change of personalities at the Indigenisation ministry did not signal any radical policy shift, although he expects whoever is in the job, whether combative or conciliatory, to deliver or face the axe.

“Nhema is an introvert, Kasukuwere is an extrovert, but don’t think that the one who talks a lot is the one who performs a lot,” Mugabe replied, apparently likening Kasukuwere to “noisy” pupils who when it comes to exams always fail. “We expect the ministers to deliver. If the introvert goes to sleep, we chase him away.”

However, Mugabe appeared to deliberately ignore the second part of the question by not answering it, suggesting he did not wish to acknowledge change in the indigenisation tack.

Nhema is reputedly an introvert known for his moderate stance and prefers to play his cards close to his chest.

Negotiations with other big mining houses such as Metalon Gold, Mwana Africa and BNC were still underway.

However, Kasukuwere was always walking a tightrope, especially after Mugabe added his voice to a chorus of criticism from senior Zanu PF and government officials.

After a series of public spats with Reserve Bank governor Gideon Gono, Mugabe had a somewhat Damascene moment in March when he publicly stated Kasukuwere had blundered over the much-touted Zimplats deal announced in January.

Under the Zimplats deal, South Africa’s Impala Platinum (Implats) agreed to sell a majority stake in its Zimbabwe unit to local blacks for US$971 million. The transaction was facilitated through vendor financing at an interest rate of 10% over an unspecified period.

“That is the problem; they gave us 51% saying that it is a loan that we are giving you, and we are paying for you in advance and then you can pay us back tomorrow,” Mugabe said.

“I think that is where our minister made a mistake. He did not quite understand what was happening, and yet our theory is that the resource is ours and that resource is our share, that is where the 51% comes from.”

Mugabe’s outburst gave further ammunition to Gono who seized on it a week later, telling the Zimbabwe Independent it would be necessary to revisit all major indigenisation deals.

“We also need to pay attention to the conditions attached to some of these transactions and violations of standing exchange control laws, rules and regulations, all of which could have been avoided had necessary consultations been done,” Gono said then.

“These problems technically render some of these transactions null and void if fundamental amendments required are not done.”

Analysts say replacing a man he criticised this year with a perceived moderate signals a softening of the hardline indigenisation approach by Mugabe in favour of a more rational one, especially now that electioneering is over following his landslide election victory.

“The coming on board of Nhema is evidence of how Mugabe is possibly softening his stance on indigenisation,” economic analyst Takunda Mugaga said. “Nhema can be viewed as testimony to Mugabe’s retreat.

He is a softer kind of minister in terms of his reputation and he is not likely to read too much into the Zanu PF manifesto (which emphasised indigenisation). His appointment is evidence that a hawkish way of doing things is not viable.”

However, the chief executive officer of the National Indigenisation and Economic Empowerment Board Wilson Gwatiringa said indigenisation of mines would continue even if there is a new minister.
“The (indigenisation) programme is moving on and we are talking to them (mining companies) as we would in the normal course of business,” Gwatiringa said yesterday.

He however refused to shed light on the current status of the deals with the mining companies as they “do not discuss transactions with the media”.

While the official position may suggest it’s business as usual, the re-deployment of Kasukuwere after stinging criticism may well represent a re-think on indigenisation, or at least a change in style to the controversial policy that remains divisive as the country battles with economic recovery after a devastating meltdown blamed on Mugabe’s leadership and policy failures.

i think this time we are going to recieve the necessary support as small business people. as long as the ministry have adequate funds to spearhead developments. i am struggling timber producer who has all the necessary equipment for work but lacking funding.

Indigenization in mining is not a bad thing, it is the targets they announced (51%) and the way they go about it (vote buying) that is questionable. Land reform is not a bad thing either. Neither is nationalisation of land a bad thing. If we say the land cannot be permanently owned by anyone, it is a property of the state which can be leased out for a certain number of years – there is nothing wrong with that. However security of tenure needs to be guaranteed for a reasonable number of years which allows people to invest in that land without fear that the land could be repossed any time. Yes farm land has been taken away suddenly from some holders including a court judge – and that is no good.

One needs to find more about the history in govt of the incoming indigenization minister to see why he was appointed there.

It appears Mr. Mugabe avoided appointing former army personnel to cabinet. The reasons I can only speculate: maybe he does not want them that close to him; or there is not enough seats for them without displacing the old guard; they are doing a fine enough job in the areas where they are deployed now. Guys with a history in the CIO do not seem to fall in that category; they can rise to sit at that table.